Inquirer ‘tax-case’ demonstrates awesome power of the press

WHETHER President Duterte is right or wrong in accusing the owners of the Philippine Daily Inquirer (PDI), the Prieto-Rufino family, of evading payment of P1.5 billion in taxes that their other company, Golden Donuts (which operates Dunkin’ Donuts), owes government, this case gives us a vivid demonstration of the paper’s awesome power and that of the press in general—which isn’t at all good for the country.

The silver lining here is that this President is proving that he has the balls to go against oligarchs and even a powerful newspaper, despite anti-Duterte critics’ claim that he will not succeed where ousted President Joseph Estrada, who also went against the PDI, failed.

A President branding the owners of one of the biggest broadsheets, especially one which portrays itself as God’s gift to journalism and democracy, anywhere else in the world would undoubtedly have been earth-shaking news. PDI, if it were in the league of the New York Times or the Washington Post, would have devoted a big part of its frontpage to debunking Duterte’s allegations. Instead, it arrogantly ignored the President’s very serious claim.

Imagine if US President Donald Trump, after ranting at the Washington Post’s “fake news,” were to accuse its owner Jeff Bezos a few days later that his Amazon online bookseller owes the IRS billions of dollars in taxes, and maybe you’d get a better picture of what I mean.

Worse, all of media would have put it as either their No.1 or No. 2 story as it has profound implications. Duterte’s tirade could only mean either one of two things: PDI’s owners have been using their media power to evade taxes, or Duterte has launched an attack on the Fourth Estate, which therefore is an attack on our republican democracy. Whichever is the case, isn’t it important enough to put on the front page?

The PDI owners’ alleged tax evasion would have also undoubtedly sold a lot of newspaper copies (and therefore revenues) during this tax-paying season when Filipinos grumble and groan, as I did, at having to pay what they think to be a huge amount of taxes, much of which will just be pilfered by corrupt officials.

President Duterte (left) exposes PDI owners’ alleged sweetheart property deal in Doha; headlines like this, reproducing an article from a foreign newspaper, (right) probably got his goat.

Guess what? Newspapers buried the story deep inside their inside pages, if they even carried it at all. PDI reported it in a short, 250-word piece in its page 13. PDI’s arrogance was evident with the article’s dismissive statement that “The Inquirer doesn’t own Dunkin’ Donuts,” even as Duterte himself had pointed out that it is not the paper itself but its owners who owned the allegedly tax-evading firm that operates the doughnut store chain.

Only Duterte
Only Duterte seems to have the balls in this government to talk against PDI. Neither the Bureau of Internal Revenue head Caesar Dulay, nor his boss, the usually talkative Finance Secretary Carlos Dominguez, bothered to expound – as they should – on their boss’ allegations. Are they afraid of PDI?

Why did our media, which has been boastful of its fearlessness, practically ignore Duterte’s allegations that PDI owners were tax evaders? The answer would give us a glimpse of one major mechanism for oligarchic power in this country.

As my late boss Raul Locsin of Business Day often told us: “A newspaper is a gun in the holster in this Wild West of a country.” Owners of one newspaper wouldn’t want to attack or offend another paper or broadcast media, even if it’s a competitor: because it would hit back. It could even send a team of investigative journalists to uncover the sins of the businesses of the owners of the other paper, particularly if they are also tax evaders, or in violation of other regulations.

That gun is especially important for a magnate, who with his ownership of a media outfit in effect sends the message loud and clear: “Cross me or make life difficult for my companies, investigate my firms’ tax payments, and I draw my gun from my holster and point it at you, and even shoot.”

Thus, the Indonesian tycoon Anthoni Salim (known in this country as Manuel V. Pangilinan) was extremely smart in risking violating the Constitution by establishing a media empire consisting of the Philippine Star, ABC-5, BusinessWorld, and even PDI (where he has 20 percent ownership), and scores of radio stations.

That is a lot of guns in his holster: Would any politician dare to pursue such questions as why a foreigner through PLDT’s pension fund controls media, in which not a single peso of foreign money is allowed by the Constitution? Has the PDI, which claims to have the best business reporters, ever run a feature explaining who really owns the Metro Pacific Group, one of the country’s biggest conglomerates now, which controls strategic industries?

I don’t think the Lopezes, whom all of the past five Presidents loved or feared, would have been able to recover much of the companies they lost during martial law if they had not controlled ABS-CBN and, in the 1980s, the Manila Chronicle.

Oligarchic control of media has been a feature of our history: The Manila Chronicle and ABS-CBN were so notoriously powerful before martial law that they controlled the nation’s agenda, and casually pulverized the Lopezes’ enemies – except Marcos of course who closed them down.

The fact that the foreign oligarch Salim and the local oligarchs Lopezes who had five Presidents behind them control a big chunk of our media shatters the myth that we have had an ideal independent press since Marcos was toppled in 1986.

Free press?
How can we have a free press, when our biggest media magnates have businesses—telecoms, power, infrastructure— in industries that are officially heavily regulated by government, or have crucial deals with government? Contrast that with the US where most owners of the biggest newspapers are only in media.

One of the crowns in the Prieto-Rufino family’s property empire is their control over the three-hectare lucrative Creekside/Mile Long commercial complex whose lease from a government firm had expired in 2002. Duterte in a speech in Qatar a few days ago claimed that the family’s possession of the land which started in 1986 was a “sweetheart deal as they went for Cory against Marcos”.

Former President Gloria Macapagal-Arroyo’s administration tried to revert the prime property back to government hands in 2009. The Prieto-Rufino family refused to return the land to government, and managed to get a court to block the government move, a case which is still pending in the courts. It was a year earlier in 2008, that former BIR officer Othello Dalanon submitted his report to his superiors alleging that Dunking Donuts evaded P1.5 billion in taxes by understating its sales and other income, and Arroyo did nothing to stop the BIR investigations. The PDI had been so vitriolic in its attacks against Arroyo in the last half of her administration.

Former BIR commissioner Kim Henares must explain, through a congressional investigation if necessary, why she had not enforced her staff’s findings that the Prieto-Rufino firm must pay immediately P1.5 billion, representing tax due and penalties. Didn’t she boast that she had gone after even such a popular figure, practically a national hero, as Manny Pacquiao to make an example of him for everyone to pay the right taxes?

Dalanon — who filed a complaint against Henares in 2014 allegedly for sitting on the Dunkin’ Donuts case — claims that the assessment became “final, executory and demandable” on January 29, 2011. I emailed PDI president Alexandra Prieto-Romualdez requesting her to get her family’s or their lawyers’ explanation or comments on this matter. I had not received a reply as of the deadline for submitting this column.

What demonstrates PDI’s power stares us in the face: Filipinos learned of the Dunkin’ Donuts’ tax case and the Mile Long controversy only now, when this had first emerged nine years ago. It would not have even entered public awareness if the President of the Republic had not exposed it.

A confession
Again, this is explained by the gun-in-the-holster theory, and I have a personal experience of it, which is a confession. I had been given a bunch of documents on the Dunkin’ Donuts tax case two years ago, when I already was a columnist for this paper. After some reflection though I didn’t write about the issue.

Why? Because I not only feared PDI’s gun in its holster, but was awed by it. What if in the future I get into trouble, and PDI front-pages my face? More importantly though, which explains why reporters and columnists shirk from ever criticizing the PDI, is the thought that maybe it could recruit me for some high position there someday, or get me to be a thrice-a-week columnist (I had written a once-a-week column there and gave it up when an old friend and colleague Dante Ang offered me a thrice-a-week one.).

But now I have realized I have to do my job as a professional journalist, with the President’s allegations requiring me to write a column on the topic so as to inform the nation.

In an interview, a few days ago at the Salim-controlled Bloomberg Philippines, PDI president Alexandra Prieto narrated the saga of how her paper survived the advertising boycott which the besieged Estrada had called against it, as it had been so critical of him.

I can’t help feeling that the timing of the interview and the mention of that topic was a message that if PDI wasn’t killed by Estrada and even became stronger, it would also emerge victorious over Duterte.

But then, Estrada’s attack against PDI was abruptly halted by his flight from Malacañang, when a people-power kind of outrage broke out during his impeachment. Would there be a similar impeachment against Duterte that would trigger outrage against him? At this time, and at least this year, that’s very unlikely.

And more importantly, in 2001, there was no such thing as social media, which any knowledgeable and objective observer would see as having overtaken in power and influence traditional media like the PDI. For some reason, social media so far it appears to be a DDS media.

Duterte’s fight with the Inquirer — largely ignored by mainstream media for reasons I explained above — could be his most crucial battle in his war against the Philippine oligarchy.

On Friday: Details of the Prieto-Rufino clan’s tax-case and its controversial control of the Creekside/Mile Long government property.

Filed under: Manila Times Columns

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